Published on: October 17, 2025, 01:46h.
Latest update: October 17, 2025, 01:46h.
- Kraken acquires Small Exchange from IG Group for $100 million
- Acquisition positions Kraken to target US prediction markets
Leading cryptocurrency brokerage Kraken is set to purchase Small Exchange from IG Group for a total of $100 million. This transaction represents a strategic entry for financial firms into the burgeoning prediction markets sector.
Small Exchange holds a designated contract market (DCM) license from the Commodities Futures Trading Commission (CFTC), essential for companies seeking to offer exchange-listed derivatives, including yes/no event contracts within the United States.
“This development integrates spot, futures, and margin products into a cohesive regulated liquidity framework, minimizing fragmentation, lowering funding latency, and fostering onshore access and performance that has largely been available offshore,” remarked Kraken co-CEO Arjun Sethi on the company’s official blog. “With CFTC oversight, Kraken can now incorporate clearing, risk management, and matching into a unified environment that adheres to the same rigorous standards as the globe’s largest exchanges.”
While the announcement did not explicitly mention “prediction markets,” “event contracts,” or “yes/no derivatives,” Kraken’s acquisition of Small Exchange is widely perceived as a foundational move toward establishing a presence in prediction markets, paving the way for the launch of an extensive suite of U.S.-based derivatives products aimed at creating a sophisticated onshore platform in the world’s biggest capital market.
Applying a Well-Tested Strategy
Mergers and acquisitions are becoming a popular strategy for established and emerging players in the prediction markets space to establish a foothold in the United States. The deal between Kraken and Small Exchange draws parallels to a $112 million transaction made by Polymarket in July for the clearinghouse and derivatives exchange QCEX LLC, which was part of its strategy to return to the U.S. market.
Kraken’s acquisition heightens discussions of competitive dynamics in the prediction markets arena. Should Kraken enter this sector, it would intensify competition with companies like Crypto.com. Additionally, Robinhood Markets (NASDAQ: HOOD) is also involved in prediction markets through a partnership with Kalshi, all while offering customers access to a multitude of cryptocurrencies, bonds, funds, and stocks.
Kraken continues to expand its offerings beyond cryptocurrencies. Earlier this year, the firm invested $1.5 billion in acquiring NinjaTrader, further diversifying its asset classes while enlarging its client base.
“Earlier this year, we acquired NinjaTrader, a prominent U.S. futures platform that enables clients to trade CME-listed cryptocurrency futures alongside spot crypto in a consolidated interface. In October, we extended this offering to encompass a wider variety of contracts, including equities, FX indices, and commodities like oil and gold,” Kraken stated.
Kraken: A Potential Major Player in Prediction Markets
It remains to be seen whether Kraken poses a significant challenge to platforms like Kalshi and Polymarket. However, the company enters this sector with distinct advantages, notably a strong brand presence within the cryptocurrency community, which is vital given its close ties to prediction markets and critical applications of cryptocurrency.
Globally, Kraken ranks as the 14th largest digital asset exchange by trading volume. Among platforms facilitating transactions in U.S. dollars, Kraken is positioned in the top five.
Offering around 1,250 markets, Kraken is also recognized as one of the most trusted brokers in the cryptocurrency industry.